We lease land, dealership facilities, offices, distribution centers, warehouses, and equipment under agreements with contractual periods ranging from less than one year to 40 years. Many of our leases contain one or more options to extend. In certain dealership lease agreements, we are the tenant and we sublease the site to a dealer. In the event the sublease is terminated, we have the option to terminate the head lease. We include options that we are reasonably certain to exercise in our evaluation of the lease term after considering all relevant economic and financial factors.

Leases that are economically similar to the purchase of an asset are classified as finance leases. The leased (“right-of-use”) assets in finance lease arrangements are reported in Net property on our consolidated balance sheets. Otherwise, the leases are classified as operating leases and reported in Other assets in the non-current assets section of our consolidated balance sheets. We have also entered into manufacturing contracts commencing in a future period where Ford’s portion of the output is expected to be significant. As a result, there may be embedded leases, and related liabilities, that will be reported as part of our financial statements, typically upon commencement of production.

For the majority of our leases, we do not separate the non-lease components (e.g., maintenance and operating services) from the lease components to which they relate. Instead, non-lease components are included in the measurement of the lease liabilities. However, we do separate lease and non-lease components for contracts containing a significant service component (e.g., energy performance contracts). We calculate the initial lease liability as the present value of fixed payments not yet paid and variable payments that are based on a market rate or an index (e.g., CPI), measured at commencement. The majority of our leases are discounted using our incremental borrowing rate because the rate implicit in the lease is not readily determinable. All other variable payments are expensed as incurred.

Lease right-of-use assets and liabilities at December 31 were as follows (in millions):


	2021		2022
Operating leases
Other assets, non-current	$	1,337	$	1,447

Other liabilities and deferred revenue, current	$	345	$	404
Other liabilities and deferred revenue, non-current	1,048		1,101
Total operating lease liabilities	$	1,393	$	1,505

Finance leases
Property and equipment, gross	$	715	$	791
Accumulated depreciation	(68)		(109)
Property and equipment, net	$	647	$	682

Company excluding Ford Credit debt payable within one year	$	76	$	86
Company excluding Ford Credit long-term debt	489		488
Total finance lease liabilities	$	565	$	574

The amounts contractually due on our lease liabilities as of December 31, 2022 were as follows (in millions):


	Operating Leases (a)		Finance Leases
2023	$	452	$	107
2024	350		91
2025	253		68
2026	176		62
2027	134		37
Thereafter	309		348
Total	1,674		713
Less: Present value discount	169		139
Total lease liabilities	$	1,505	$	574

Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions):


	2020		2021		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	434	$	424	$	459
Operating cash flows from finance leases	15		14		22
Financing cash flows from finance leases	105		52		83
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	304	$	441	$	528
Finance leases	306		192		95

The components of lease expense for the years ended December 31 were as follows (in millions):


	2020		2021		2022
Operating lease expense	$	463	$	444	$	463
Variable lease expense	57		49		62
Sublease income	(14)		(16)		(15)
Finance lease expense
Amortization of right-of-use assets	27		34		60
Interest on lease liabilities	15		14		22
Total lease expense	$	548	$	525	$	592

The weighted-average remaining lease term and weighted-average discount rate at December 31 were as follows:


	2020		2021		2022
Weighted-average remaining lease term (in years)
Operating leases	6.3		6.0		5.5
Finance leases	14.8		12.1		12.2
Weighted-average discount rate
Operating leases	3.8	%	3.3	%	3.7	%
Finance leases	3.5		3.3		3.9